Server or Cloud for Small Business – Comparison

With server 2003 End-of-Life just around the corner, many businesses find themselves deciding what to do about a new server.  There’s been a lot of big talk lately about cloud what I can do for you, and if you go out and search you’ll find all kinds of options. However, do you think but the cloud will be best for you? Or, should you think about replacing that server with another server?

The Cloud Is a Great Option

The cloud is a great option; however there are differences between going to the cloud for a server, and using the cloud for services.  If you’re just looking for a file sharing option for all of your end users, then going to the club may be a good option. They can use their mobile devices to connect to it, there would still be security, and it would allow for easy collaboration no matter where the end users are. However a lot of businesses find themselves in different circumstances on what they need from their server. There are also other cloud services available such as data backup services, endpoint security services, email filtering services, employee monitoring services, etc. If these are the only types of things you use, the cloud might be a good option.

Replacing Server with another Server Still a Good Option

For a lot of our clients, replacing the server with another physical server and updated software is still the best option.

Many of our clients have a line of business application that they use. This is usually a typical circumstance. When it comes to the line of business application, the application developer usually has specific requirements for what the customer/end user needs to use. This often means that they are not able to make a move to the cloud for their server.

If however it turns out that you are able to move to the cloud, many advertised solutions for cloud servers often advertise the bare minimum and that’s usually a pretty small server. Typically a single server is going to have at least 16 GB RAM, a quad core processor, and a fast hard drive array. This is not found however in base cloud servers.  Where they may advertise $35 a month for a server instance, it doesn’t take into consideration all the bandwidth movement that might be needed by your users.  An organization with 5 users is not going to be transferring as much data back and forth to that server as a client with 25 users. This will be one effect on the stated prices.  Another consideration is that $35/month server is at a bare minimum of hardware resources. To get a typical server speed you often would be looking a hundreds of dollars per month.

Comparison of Server or Cloud for Small Business and Pricing

As of today, I configured a typcial server from Dell with 1 4 Core Xeon Processor, 16 GB RAM, and a RAID 5 600 GB SAS (15k) array and Windows Server 2012 R2.  The cost for this configuration came out to $2788.19 (before tax & shipping).

I also configured a virtual machine with similar resources from Microsoft Azure.  This server was configured with 4 cores, 14GB RAM, and a 100GB disk.  The estimate monthly cost for this came out to be $416.64.

If you figure that a server will have a useful life of 3 years (this is figured by the support that comes with the physical server purchase), a physical server will cost you $77.45/month.

So then, at this difference, why would you even consider a cloud option?  With the cloud option, the provider will maintain the instance for you, including the mainitenance of the hardware and availability, yet you will still be responsible for maintaining the operating system and the applications running on the virtual machine.  However with a physical server, you will need to have the server setup and then will be responsible for maintaining the hardware and availability, the operating system, and any applications or roles installed on the server.  If you employ someone that does this, you already have those costs built into your payroll.  If you need to have a service provider maintain these services, it will still leave you with $339.19/month.  Most IT service providers will manage a single server for under this amount per month (Our services pricing is here).  This then comes down to the price of the provider you select if it becomes feasible to make the switch.

Conclusion of Server or Cloud for Small Business

Regardless of which direction you end up going, as a big question you need to ask yourself is ‘Will our line of business applications support it? If this option is supported then you can get to figuring out costs vs. availability vs. up time, etc.

The best advice I can give is what Microsoft has listed as four steps for upgrading Windows Server 2003. The four steps in this list are “Discover,” “Assess,” “Target,” and “Migrate.”  First look at what you have, then look at what roles are in place on what you have, then find what services you can outsource to a cloud service provider and what services need to be kept in house, finally migrate or move all applicable services to the cloud. Once you’ve figured all these items, you can then figure your costs of doing these things and what your long term costs will be and what would be feasible for your organization.

If you do have any further questions or if this process seems like it is overwhelming, many service providers can help you along further and most, as we do, will give you a free consultation in migrating these systems.

TR Technologies assists all of our clients with both cloud and in-house systems. Visit us here if you need any further consulting on moving forward.